Havruta Limited had the following changes during 2022:1 January 2023 $2,000,000 shares of $0.5 each 30 June 2023Bonus issue made of 1 for 4 31 October 2023Right issue of 1 for 3. Rights price was $2.0 and the market value was $6.00 per share Havruta Limited also had the following changes during 2023: 30 June 2023Convertible preferred shares: 20,000, convertible into 5 shares of common stock of each and paying dividend of $20 per share 31 August 2023$2,000,000 of 10% convertible loan, convertible into 3 ordinary shares per $5 of loan in the next five years 31 July 2023Stock options: 50,000 with the exercise price of $5 (Average market price of company shares during the year was $6 per share) Earnings for the year ended 31 December 2022 were $5,000,000 after taxEarnings for the year ended 31 December 2023 were $5,000,000 after tax The tax rate was 40% Required: Compute the basic EPS and diluted EPS for both 2022 [6 marks] and 2023 [7 marks]. For consistency, the beginning number of shares in 2023 is based on the weighted number of shares in 2022. All the financial instruments are dilutive.
a) Provided information is insufficient to compute EPS
b) Basic EPS 2022: $0.625, Diluted EPS 2022: $0.625
c) Basic EPS 2022: $2.5, Diluted EPS 2022: $1.96
d) Basic EPS 2022: $1.25, Diluted EPS 2022: $1.00
